The tale of delicate diplomacy

Are we witnessing a historic slugfest between the World’s largest democracy and the largest economy? If you have been observing the turn of events over the last 3 years, you will agree that we are at the pinnacle of a delicate diplomatic tussle, especially after the last 2 years of China-US trade war which acted as a perfect diversion for India. Prime Minister Modi just fell short of campaigning for Trump in front of 50,000 Indian Americans (Howdy Modi in Texas) and hoped it would help India’s prospects of avoiding any further trade war escalation. But Trump being an outsider is no Obama and clearly demarcates business and ideology. Trump can nudge even the closest friend if he believes that the friendship is putting him or his eco-system at a disadvantage. Before India could realize the damage done, America took away the GSP status which gave preferential treatment over trade to India. The icing on the cake was Trump’s statement calling India a developed country. While Indian establishment has been scratching its head over how to salvage the situation as it never dealt with a businessman in the form of a politician, Trump made a shocking revelation that the upcoming trip in no way should be considered the end of trade negotiations. Added to that, Airforce one will not carry key trade negotiators from Trump administration making it crystal clear to the world that friendship doesn’t warrant concessions or favors. As Gordon Gekko says in the 1989 classic, Wall Street — “ Christmas is over and business is business”, India needs to get down to business. India falls well short of a professional negotiating team that dedicatedly works for situations like these. This ofcourse has roots to the stigma that Indians hold against industry veterans / business people fronting the administration.

Taking a step back, after the emergence of a new India at the turn of 2014, India realized the power it can wield in the regional and global politics. She for the first time understood that it can mix business with foreign policy for quick and favorable results. The government’s strong and muscular diplomacy since 2014, only moved India away from the center of the foreign policy scale. The unsaid and unwritten policy of India’s founding fathers on non-alignment got tested for the first time since Modi government came into power with a decisive mandate. This is clearly visible in the recent curbs on palm oil imports from Malaysia after the country’s President took a public stand against India on the issue of Kashmir. Added to that, is the repeated strong protest and expected trade curbs against a military power like Turkey. These are testaments to the fact that the role of India is not that of a diminishing one, while a lot of left leaning media houses would want to argue otherwise. I will ofcourse not want to justify my claim of India being an economic superpower with the nominal GDP numbers, that places the country ahead of France and UK (being a larger country in terms of land mass and working population). It is with the fact that India is a major trading partner for both allies and non-allies alike and hence plays the card of a demand center effectively. India is expected to be a middle income driven economy by 2030 as per a report from World Economic Forum. This by itself translates that the country has the second largest consuming population as on date. This is not a welcome news for most of the Western countries that are running huge deficits and higher cost of living. The saturation attained by both US and the Western Europe will see a further increase in unsold inventory at its factories in the coming decades unless India opens up its borders for trade. For these markets to be able to satiate the needs of its workforce and support government’s over the top social security cheques, India needs to be a business partner apart from a political ally. This by itself sums up the frustration of the current American establishment. Trump’s rhetoric of “Make America Great Again” and Modi’s “Make in India” have been at odds for long and for all the obvious reasons. You have a RW leader who believes that his country has been taken advantage of and mocked at by the global community pitted against another RW leader who aims for self-sufficiency and a global trade & cultural leadership. It’s surely not the case of an unstoppable force against an immovable object at odds here, but the general developed world feeling betrayed by the developing counterparts.

To deal with the new challenge, Indian administration with almost no room for any experimentation is playing by its outdated rule-book of political diplomacy by spending close to $120Mn in welcoming the first family and showing them around. The crux of the entire issue is not being thought of and being mis-understood / handled. Trump works like a businessman and wouldn’t want to lose his customers (voters). He will try to move heaven and earth to achieve his poll promises prior to the all important 2020 re-election. The most sensitive of them is his commitment to bringing back American forces stationed on foreign soil. Think of Afghanistan, one will find a helpless commander in chief who can’t keep his promise unless under a stable political climate. He also can’t rely on state sponsored terrorists anymore (the mistake done by successive American governments). He knows that the American investment has matured in Afghanistan and has to exit. For all logical reasons, the only country that has the muscle to give a clean exit to America is India. India, still miles behind any direct military intervention in areas that are not her concern, needs to hurry up to make it a fight of equals.

To be brutally honest, LHS ≠ RHS during the upcoming Trump’s visit to India like most of them like to think. Apart from trade, Trump administration will also want to frustrate India by stressing on the perceived minority oppression in India. Trump holds more levers than Modi and this calls for policy innovation and meticulous study of the President’s compulsions in an election year, rather than focus on conventional systems and processes.



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Vanamali Mateti

Deal Maker, Conversationalist, Political Enthusiast, Economist, Orator, Blogger